*

*

Chemical, Packaged Oils and Lubricants Pre-Proposal Conference

Defense Logistics Agency

Defense Supply Center Richmond

11 August 2015

*

*

Agenda

0730-0830    Clear Security/Obtain Badges

0830 -0900   Arrival and Registration

0900-0915	Director/Chief of the Contracting Office Comments

0915-1000    Introductions

1000-1045	Chemical & Petroleum Solicitation Overview (Julia 		Roquemore)

1045-1100     Break

1100-1230     Open Forum Question and Answer Session

*

*

Panel

Contracting Officer (Follow On)		Ms. Julia Roquemore

Acquisition Specialist 			Ms. Jodi Beard

Contracting Officer (Current)		Ms. Tonya Green

Chem/POL Advisor			Mr. James (Travis) Beasley

Program Manager 			Mr. Michael Gargiulo

Program Management Support 		Mr. Steve Morgan

Office of Council 			Mr. Jason Morgan

Supply Planning 			Mr. Pete Campisi

Technical 				Mr. Ernest Jenioleonis

*

*

Ms. Julia Roquemore

Contracting Officer

Chief, Strategic Contracting Division

Chemical and Petroleum Overview 

*

*

        - Current Contract Expiration: July 2017
        - 5600 + DLA Managed NSNs
        - 3327 active
        - 2326 inactive 
        - Integrated World-Wide support for DLA customers including:

	-  Worldwide support thru customer direct shipments

	-  Replenishment of OCONUS Forward Stock Locations(FSL) via                      	direct shipments
        - Contract Type – Single award/FP IDIQ/ with EPA
        - Est annual material spend demand - $100M 
        - Est monthly delivery orders – 10K per month
        - Contract Period – 5 year base
        - Option 1 – 3years
        - Option 2 - 2 years
        - Est total contract value – $1.5B
        - Performance Metrics

Introduction

*

*

*

        - Comprehensive Management to include:

Procurement of materials

Planning & Forecasting

Order Processing & Fulfillment

Procurement & Purchasing

Inventory Management

Quality Control

Shelf-Life Management

Storage, Packaging, Transportation & Distribution

Obsolescence Management

Data Management & Delivery

Customer Support Services

Material Returns

Scope

*

*

        - Maintain responsibility of:

	Alternate source approvals

	Surplus offers

	First Article Test (FAT) requirements

	Qualified Products List (QPL)

	Quality Assurance Letters of Instruction

	Government Lot Acceptance Testing

	PQDR/SDR approval

	Military/Federal Specifications

	Waivers and Deviations

	Creating new NSNs as required

DLA Responsibilities

*

*

*

Maintaining the Qualified Status List (QSL)

Approving Safety Data Sheets (SDS) and Hazard Warning Labels 	(HWLs)

Origin inspection determination

Provide access to the QSL on an as needed basis

Procurement Item Descriptions (PID) updates. 

Coordinate communications with customers and provide assistance with Contractor access to customer locations.

Make semi-annual Economic Price Adjustments (EPA).

Provide Contractor access to Government systems, such as, Hazardous Material Information Resource System (HMIRS) & webSDR, as needed.

Furnish all drawings and bid sets.

DLA Responsibilities continued

*

*

Delivery Requirements
        - Performance tracking will start upon the issuance of the first delivery order
        - Fill Rate Metric will assess performance over a 12 month performance period
        - The first performance period will start at FOC and will continue through contract expiration
        - Fill Rate annual % will be measured on the formula below: 

	FR% = (TRS/TRR) * 100

	Where: FR% = Fill Rate (rounded to the nearest tenth)

	TRS = Total Orders Shipped complete within the designated measurement timeframe

	TRR = Total Orders Received in a specific performance period
| FILL RATE MEASUREMENTS |
|------------------------|
|                        | CONUS and OCONUS Shipment to CCPs/POE |
|                        | Delivery Order Category (CAT) Codes |  |
| Priority 01 – 03       | CAT 1 (High Priority) | 2 Days |
| Priority 04 – 08       | CAT 2 | 3 Days |
| Priority 09 – 15       | CAT 3 | 4 Days |

*

*

Delivery Requirements Continued
        - Contractor successful completion of CONUS demand:

	- after receipt of electronic requisition and customer has received a product 	at the customer designated site within the specified TDD standards.  
        - Contractor completion of OCONUS/FMS demand:

	 - after receipt of electronic requisition, the Contractor has delivered a 	product to the designated CCP, freight forwarder, or CONUS POE for 	OCONUS customer direct orders within the specified TDD standards.
| TDD DELIVERY STANDARDS |
|------------------------|
|                        | CONUS and OCONUS Shipment to CCPs/Ports of Embarkation |
|                        | Issue Priority Designator (IPG) | FOB Destination |
| Priority 01 – 03       | IPG 1 (High Priority) | 6 Business Days |
| Priority 04 – 08       | IPG 2 | 10 Business Days |
| Priority 09 – 15       | IPG 3 | 15 Business Days |

The Contractor has successfully filled a CONUS demand when, after receipt of an electronic requisition, the customer has received a product at the customer designated site within the specified TDD standards.  

The Contractor has successfully filled an OCONUS/FMS demand when, after receipt of an electronic requisition, the Contractor has delivered a product to the designated CCP, freight forwarder, or CONUS POE for OCONUS customer direct orders within the specified TDD standards.

*

*

*

        - Fill Rate = The amount of time measured from receipt of order to shipment. 
        - The annual performance Fill Rate% will be computed using the formula below:  

	Fill Rate % will be measured on the formula below: 

	FR% = (TRS/TRR) * 100

	Where: FR% = Fill Rate (rounded to the nearest tenth)

	TRS = Total orders shipped complete within the designated measurement times

	TRR = Total orders received in a specific performance period
        - NOTE:  Nuclear Reactor Program (NRP) items require 95% fill rate

Contract Metrics – Fill Rate
| Performance Period 1: (Completion of Transition Period thru contract completion) |
|----------------------------------------------------------------------------------|
| Fill Rate                                                                        | Disincentive |
| 90% or greater                                                                   | 0 |
| 88% - 89.9%                                                                      | -3% |
| 85.1% - 87.9%                                                                    | -5% |
| 85% or less                                                                      | -10% |

Fill Rate (FR): The amount of time measured from receipt of order to shipment.  Although the contractor is required to meet the Time Definite Delivery (TDD) Standards outlined in the Statement of Work (SOW), the Fill Rate will be measured based on ship date rather than delivery receipt date. Monthly fill rates will be computed to assess contractor performance and identify problems as they occur.  The annual performance Fill Rate% will be computed using the formula below:  

Fill Rate % will be measured on the formula below: 

FR% = (TRS/TRR) * 100

Where: FR% = Fill Rate (rounded to the nearest tenth)

	TRS = Total orders shipped complete within the designated measurement times

	TRR = Total orders received in a specific performance period

The disincentive will be calculated based on the total value of all delivery order(s) not shipped complete in accordance with the defined fill rate standards for each defined 12 month performance period.  The disincentive amount will be deducted in a lump sum from the management fee paid in the period(s) immediately following the 12 month performance period.

*

*

*

Contract Metrics – Backorder
        - The total number of Backorders for a period will be categorized by the number of calendar days the orders are late.  
        - The degree of disincentive increases proportionate with the age of the backorders as shown in the above chart   				
| Backorder Category | Number of Calendar Days Late | Disincentive Percentage |
|--------------------|------------------------------|-------------------------|
| A                  | 0-14                         | 0%                      |
| B                  | 15-20                        | -3%                     |
| C                  | 21-50                        | -8%                     |
| D                  | 51-80                        | -15%                    |
| E                  | >81                       | -25%                    |

The calculation of the backorder disincentive fee is as follows:

Backorder Disincentive Fee =  

[(Value of Category A Backorders) x Disincentive % for Category A]

+

[(Value of Category B Backorders) x Disincentive % for Category B]

+

[(Value of Category C Backorders) x Disincentive % for Category C]

+

[(Value of Category D Backorders) x Disincentive % for Category D]

+

[(Value of Category E Backorders) x Disincentive % for Category E]

Example:  Total Value of All Backorders: $6,000,000

Category	Calendar

Days Late	Value of Backorders	Disincentive %	Disincentive

Calculation

A	0-7	$750,000	0%	$0

B	8-20	$2,000,000	-3%	($60,000)

C	21-50	$1,500,000	-8%	($120,000)

D	51-80	$1,000,000	-15%	($150,000)

E	>81	$750,000	-25%	($187,500)

Totals		$6,000,000		$517,500

Backorder Disincentive amount = $517,500

The Backorder disincentive will be tracked monthly and calculated on an annual basis.  The disincentive will be calculated based on the total value of all late delivery order(s) in each of the above categories for each defined 12 month performance period.  The disincentive amount will be deducted in a lump sum from the management fee paid in the period(s) immediately following the 12 month performance period.

Backorder disincentives will commence with Contract Year 3 (Performance Year 2).

Orders excluded from the Fill Rate metric are excluded from the Backorder disincentive. 

*

*

*

        - Offerors other than U.S. Small Business Offerors must provide a Subcontracting Plan in accordance with FAR 52.216-9 and DFARS 252.219-7003 (or DFARS 252.219-7004 if the company has a Comprehensive Plan)
        - All offerors must provide a Small Business Participation Proposal
        - Instructions begin on page 10 of the Instruction to Offerors.

Small Business Participation Plan

H-903  SMALL BUSINESS SUBCONTRACTING

In purchasing material to satisfy this contract, the Contractor must ensure that small businesses account for at least 50% of all dollars spent annually for delivered supplies, computed as follows:  Value of items delivered each year from contractor-owned stock which the Contractor purchased from Small businesses divided by the total value of all items delivered each year from contractor owned stock.  Item values will be computed by multiplying the unit price of the items at the time of delivery order issuance by the quantity shipped.  

The following incentives and disincentives apply:

No incentive or disincentive will apply to a small business performance range of 50% – 65%.

A 2% incentive will apply to any additional material dollars going to small business above 65%.  For example, if the Contractor provides $100M worth of subcontracted material in a given performance period and the Contractor subcontracts $67M to small businesses, the Contractor will receive an incentive of $40,000.  Calculation is as follows:

$67M - $65M (65% Goal) = $2M x 2% = $40,000.

A disincentive of 5% will apply to any reduction of material dollars going to small business below 50%.  For example, if the Contractor provides $100M worth of subcontracted material in a given performance period ($50M representing 50% of that amount) and the Contractor only subcontracts $48M to small business, the Contractor will be charged a disincentive through a lump sum reduction of the Management fee payment in the amount of $100,000.  Calculation is as follows:

$50M (50% Min Goal) – $48M  = $2M x 5% = $100,000.

Due to the importance of small business participation in this program, the disincentive associated with this metric is intentionally more stringent.  The total incentive for small business subcontracting is not defined beyond the regulatory standards as included in the approved subcontracting plan, e.g. no specific category of small business entities is required for the attainment of the goal.

Performance for the Small Business Subcontracting Metric will be tracked on an annual basis and shall be reflected on the Small Business Subcontract spend analysis report.  

*

*

*

        - Due to the importance of small business participation in this program, the disincentive associated with this metric is intentionally more stringent.
        - No specific category of small business entities are required for the attainment of the goal.
        - Performance for the Small Business Subcontracting Metric will be tracked on an annual basis and shall be reflected on the Small Business Subcontract spend analysis report.  

Small Business Participation Plan
| Subcontracted Material $ to SB | Incentive/Disincentive |
|--------------------------------|------------------------|
| <50%                        | -5%                    |
| 50%-65%                        | 0%                     |
| 65%                            | 2%                     |

H-903  SMALL BUSINESS SUBCONTRACTING

In purchasing material to satisfy this contract, the Contractor must ensure that small businesses account for at least 50% of all dollars spent annually for delivered supplies, computed as follows:  Value of items delivered each year from contractor-owned stock which the Contractor purchased from Small businesses divided by the total value of all items delivered each year from contractor owned stock.  Item values will be computed by multiplying the unit price of the items at the time of delivery order issuance by the quantity shipped.  

The following incentives and disincentives apply:

No incentive or disincentive will apply to a small business performance range of 50% – 65%.

A 2% incentive will apply to any additional material dollars going to small business above 65%.  For example, if the Contractor provides $100M worth of subcontracted material in a given performance period and the Contractor subcontracts $67M to small businesses, the Contractor will receive an incentive of $40,000.  Calculation is as follows:

$67M - $65M (65% Goal) = $2M x 2% = $40,000.

A disincentive of 5% will apply to any reduction of material dollars going to small business below 50%.  For example, if the Contractor provides $100M worth of subcontracted material in a given performance period ($50M representing 50% of that amount) and the Contractor only subcontracts $48M to small business, the Contractor will be charged a disincentive through a lump sum reduction of the Management fee payment in the amount of $100,000.  Calculation is as follows:

$50M (50% Min Goal) – $48M  = $2M x 5% = $100,000.

Due to the importance of small business participation in this program, the disincentive associated with this metric is intentionally more stringent.  The total incentive for small business subcontracting is not defined beyond the regulatory standards as included in the approved subcontracting plan, e.g. no specific category of small business entities is required for the attainment of the goal.

Performance for the Small Business Subcontracting Metric will be tracked on an annual basis and shall be reflected on the Small Business Subcontract spend analysis report.  

*

*

*

        - Material priced at time of award represents the fixed commodity price for a six-month period 
        - Pricing will be adjusted semi-annually throughout the life of the contract in accordance with Economic Price Adjustments (EPA) pursuant to clause 52.216-9030. 
        - EPA applies to material only
        - Transition and Management Fees are to be priced for Base and Option Periods at time of proposal.
        - Throughput Fee is to be proposed as a percentage at the time of proposal.  This percentage will be added to material prices and paid as part of the material price. 

Pricing

*

*

Throughput Fee:  A fixed percentage is established to cover expenses that vary with the volume of business such as the costs of transportation and warehousing.  The fee is applied to each NSN unit price and is paid on each delivery order issued.   This fee is applicable throughout the entire contract.    

Management Fee:  A fixed annual dollar amount is established to cover fixed costs incurred in the overall management of the supply chain.  This fee is applicable throughout the entire contract term and is paid monthly.   

Transition Fee:  A fixed dollar amount is established for the first year to cover transition and implementation costs.  The fee will be paid in accordance with established milestones as defined by the approved transition plan.

FEES

*

*

        - Proposals Due:  02 Nov 2015
        - Volume 5, Past Performance is requested by Oct. 23
        - 7 Volumes
        - Completed RFP
        - Technical Proposal
        - Safety Data Sheet & Hazardous Warning Labels
        - Management Proposal
        - Past Performance
        - Small Business Participation Plan
        - Price Proposal
        - Page limits apply to the Technical and Management Proposals

Instructions to Offerors

*

*

        - Scenario Based Questions:
        - Will be provided upon submittal of proposal
        - Will be evaluated as part of the Technical Subfactors (Quality Control and  Product Management) and Management Subfactor (Order Fulfillment)
        - Responses will be due within 3 days

Instructions to Offerors (Cont’d)

*

*

        -     Best-Value/Trade-off Source Selection 
        - Evaluation Factors & Sub-Factors:
        - Technical (Each sub-factor is equal and rated at the sub-factor level)
        - Quality Control
        - Product Management
        - Management (Each sub-factor is equal and rated at the sub-factor level)
        - Order Fulfillment
        - Risk Management
        - Transition Plan
        - Past Performance
        - Small Business Participation Plan
        - Cost/Price
        - Scenario Based Questions will be included in the evaluation of Quality Control, Product management and Order Fulfillment
        - Factor Weighting:

Technical, Management, Past Performance, and SB Participation Plan are weighted equally. When combined, these non-price factors are significantly more important than Cost/Price. 

Evaluation Criteria

*

*

        - The Gov’t reserves the right to award without discussions
        - Communication (Exchanges) between the Government and Offerors will be controlled by the KO
        - Email may be utilized only if it can be encrypted
        - Exchanges may include clarifications, communications and discussions as defined in FAR 15.306
        - All exchanges will be documented in Evaluation Notices (ENs)

Evaluation Process

*

*

        - The Source Selection Evaluation Board / Source Selection Evaluation Team will:
        - Evaluate proposals
        - Prepare Evaluation Notices (Ens)
        - Prepare the Competitive Range Determination (if required)
        - The KO releases the ENs
        - ENs evaluated by SSET
        - Final Proposal Revisions requested

Evaluation Process

*

*

        - Chem Pol Website:

http://www.aviation.dla.mil/userweb/aviationsupplier/commodities/ChemPetro.asp
        - Includes:

	-  RFP and attachments

	-  RFP amendments

	-  Miscellaneous reports

	-  Pre-proposal conference information and questions and answers

Chem/Pol Website

*

*

        - 27 Jul 15 – RFP Issue
        - 11 Aug 15 - Pre-Proposal Conference
        - 02 Nov 15 – Receipt of Proposals
        - 08 Dec 15 -  Initial Evaluation complete
        - 20 Jan 16 – Conclude Discussions
        - 18 July 16 – Conclude all internal reviews, documentation and approvals
        - 19 July 16 – Award contract

Key Milestones

*

*

Chemical, Packaged Oils and Lubricants Industry Day

Question & Answers